Even OEMs sitting on the largest piles of
cash in the industry cannot afford to invest in
every major opportunity. The need for sharp
advice on strategic investments is intense
right now as manufacturers weigh whether
they should spread out their bets by investing
in numerous pilots or make bigger, higher-risk investments in one or two areas. Nearly
all investments related to connected cars,
mobility, major manufacturing innovations,
global production expansion and the like
requires some element of partnership. Before
those partnerships are forged, however,
manufactures need help from their consulting
partners in charting a clear course for how
they are going to participate in the space.

“Automotive companies need to decide
which portion of the new value-add they want
to make themselves, and what they want to
source,” notes Klaus Stricker, a partner in Bain
& Company’s Frankfurt office and leader of the
firm’s automotive practice.

 How can we step on the gas
pedal in all areas?

Stricker also points to a need for moreautomotive companies to adopt the same,streamlined “trial and error” approachesembraced throughout the tech industry.Woodward notes that automakers are reducingdesign cycles and dramatically increasingthe cadence of new product launches. From1997 to 2016, OEMs introduced an average39 new models a year globally; from 2017through 2020, this figure is projected to leap to58 new models annually, Woodward notes toillustrate a growing emphasis on speed. Thatneed extends to “commercializing innovationsand managing the innovation queue” for newmodels, components and options, Collie pointsout. “There are a ton of great ideas out there, butthe process commercializing those ideas intoproducts consumers will buy must be conductedextremely quickly,” he adds. IBM GlobalAutomotive, Aerospace and Defense LeaderAlexander Scheidt agrees, emphasizing thatautomotive consulting practices have to becomemore agile, too. “Today, automotive companiesneed to make a decision, do a proof of concept,make the design, implement, build and learn,”Scheidt says. “You have to be very fast.”

 How do we make money from
connected cars?

Talent challenges aside (see “Talent is also
Transforming” side bar), OEMs need help
figuring out business models related to the
evolution of connected vehicles that Deloitte
U.S. Automotive Practice Leader Craig
Giffi says resemble “rolling computers.”
Do the OEMs build their own technology
capability? Do they rely on suppliers? Do
they form partnerships with tech companies?

Regardless of which of those options or
mix of options manufactures select, a more
important question awaits: How do we really
make money doing this? The answer has so far
eluded OEMs. Rolling computers generate a
bounty of new data about consumer behaviors
and preferences. Manufacturers need help
figuring out how to generate revenue from this
data and also the extent of their involvement
in collecting, storing, protecting and analyzing
in-vehicle data. That capability marks a core
competency of some well-known technology
companies. “We’ve seen this play out over
and over in the tech world,” Giffi adds. “A
company develops connectivity and then